<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended January 2, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 001-13615
Rayovac Corporation
--------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 22-2423556
----------------------- -------------
<TABLE>
<S> <C>
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
601 Rayovac Drive, Madison, Wisconsin 53711
-------------------------------------------
(Address of principal executive offices) (Zip Code)
(608) 275-3340
--------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
--------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes ( X ) No ( )
The number of shares outstanding of the Registrant's common stock, $.01
par value, as of February 11, 2000, was 27,490,552.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RAYOVAC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
January 2, 2000 and September 30, 1999
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
-ASSETS-
2000 1999
------------ ----------
<S> <C> <C>
Current assets:
Cash and cash equivalents ........................................................................ $ 19,309 $ 11,065
Receivables ...................................................................................... 152,288 141,321
Inventories ...................................................................................... 82,579 81,618
Prepaid expenses and other ....................................................................... 21,145 22,849
--------- ---------
Total current assets....................................................................... 275,321 256,853
Property, plant and equipment, net ................................................................... 110,359 110,778
Deferred charges and other, net ...................................................................... 36,257 36,420
Intangible assets, net ............................................................................... 127,671 128,850
========= =========
Total assets ............................................................................. $ 549,608 $ 532,901
========= =========
-LIABILITIES AND SHAREHOLDERS' EQUITY -
Current liabilities:
Current maturities of long-term debt ............................................................. $ 24,772 $ 22,895
Accounts payable ................................................................................. 91,631 85,524
Accrued liabilities:
Wages and benefits and other ................................................................ 38,511 37,556
Recapitalization and other special charges .................................................. 1,947 6,482
--------- ---------
Total current liabilities.................................................................. 156,861 152,457
Long-term debt, net of current maturities ............................................................ 304,824 307,426
Employee benefit obligations, net of current portion ................................................. 14,285 12,860
Other ................................................................................................ 14,040 13,698
--------- ---------
Total liabilities ......................................................................... 490,010 486,441
Shareholders' equity:
Common stock, $.01 par value, authorized 150,000 shares; issued
56,969 and 56,970 shares respectively;
outstanding 27,491 and 27,490 shares, respectively ............................................. 570 570
Additional paid-in capital ........................................................................... 103,585 103,577
Retained earnings .................................................................................... 84,020 70,100
Accumulated other comprehensive income: .............................................................. 1,409 2,199
Notes receivable from officers/shareholders .......................................................... (890) (890)
--------- ---------
188,694 175,556
Less treasury stock, at cost, 29,480 and 29,480
shares, respectively .............................................................................. (129,096) (129,096)
--------- ---------
Total shareholders' equity ................................................................ 59,598 46,460
--------- ---------
Total liabilities and shareholders' equity ................................................ $ 549,608 $ 532,901
========= =========
</TABLE>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THESE STATEMENTS.
2
<PAGE>
RAYOVAC CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
For the three month periods ended January 2, 2000 and
January 3, 1999
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
2000 1999
------------ ----------
<S> <C> <C>
Net sales ..................................................... $ 214,790 $ 160,542
Cost of goods sold ............................................ 110,829 81,859
--------- ---------
Gross profit ............................................. 103,961 78,683
Selling ....................................................... 58,568 47,589
General and administrative .................................... 13,365 8,472
Research and development ...................................... 2,555 2,403
Other special charges ......................................... 0 648
--------- ---------
Total operating expenses ................................. 74,488 59,112
Income from operations ................................ 29,473 19,571
Interest expense ............................................ 8,121 3,656
Other expense (income) ...................................... (63) 227
--------- ---------
Income before income taxes .................................... 21,415 15,688
Income tax expense ............................................ 7,496 5,696
--------- ---------
Net income ............................................ $ 13,919 $ 9,992
========= =========
BASIC EARNINGS PER SHARE
Weighted average shares of common stock outstanding ........... 27,490 27,483
Net Income .................................................... $ 0.51 $ 0.36
DILUTED EARNINGS PER SHARE
Weighted average shares outstanding and equivalents
outstanding ................................................. 29,106 29,171
Net Income .................................................... $ 0.48 $ 0.34
</TABLE>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THESE STATEMENTS.
3
<PAGE>
RAYOVAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
For the three month periods ended January 2, 2000 and January 3, 1999
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income ...................................................... $ 13,919 $ 9,992
Non-cash adjustments to net income:
Amortization ................................................ 2,188 693
Depreciation ................................................ 4,222 2,889
Net changes in assets and liabilities ........................... (11,289) (7,567)
-------- --------
Net cash provided by operating activities ................ 9,040 6,007
Cash flows from investing activities:
Purchases of property, plant and equipment ...................... (3,472) (3,995)
Proceeds from sale of property, plant and equipment ............. 326 0
-------- --------
Net cash used by investing activities .................... (3,146) (3,995)
Cash flows from financing activities:
Reduction of debt ............................................... (54,531) (3,831)
Proceeds from debt financing .................................... 53,310 3,318
Other ........................................................... 3,607 (351)
-------- --------
Net cash provided (used) by financing activities ......... 2,386 (864)
-------- --------
Effect of exchange rate changes on cash and cash
equivalents ..................................................... (36) 0
-------- --------
Net increase in cash and cash equivalents ................ 8,244 1,148
Cash and cash equivalents, beginning of period ......................... 11,065 1,594
-------- --------
Cash and cash equivalents, end of period ............................... $ 19,309 $ 2,742
======== ========
</TABLE>
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THESE STATEMENTS.
4
<PAGE>
RAYOVAC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1 SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION: These financial statements have been prepared by
Rayovac Corporation (the "Company"), without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission (the
"SEC") and, in the opinion of the Company, include all adjustments (all
of which are normal and recurring in nature) necessary to present
fairly the financial position of the Company at January 2, 2000,
results of operations for the three month periods ended January 2,
2000, and January 3, 1999, and cash flows for the three month periods
ended January 2, 2000, and January 3, 1999. Certain information and
footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such SEC rules and regulations. These
condensed consolidated financial statements should be read in
conjunction with the audited financial statements and notes thereto as
of September 30, 1999. Certain prior year amounts have been
reclassified to conform with the current year presentation.
DERIVATIVE FINANCIAL INSTRUMENTS: Derivative financial instruments are
used by the Company principally in the management of its interest rate,
foreign currency and raw material price exposures. The Company does not
hold or issue derivative financial instruments for trading purposes.
The Company uses interest rate swaps to manage its interest rate risk.
The net amounts to be paid or received under interest rate swap
agreements designated as hedges are accrued as interest rates change,
and are recognized over the life of the swap agreements, as an
adjustment to interest expense from the underlying debt to which the
swap is designated. The related amounts payable to, or receivable from,
the counter-parties are included in accrued liabilities or accounts
receivable. The Company has entered into a series of interest rate swap
agreements which effectively fix the interest rate on floating rate
debt at a rate of 6.404% for a notional principal amount of $75,000 for
the period October 1999 through October 2002. The unrealized portion of
the fair value of these contracts at January 2, 2000 was $662.
The Company has entered into an amortizing cross currency interest rate
swap agreement. The agreement effectively fixes the interest and
foreign exchange on floating rate debt denominated in U.S. Dollars at a
rate of 5.34% denominated in German Marks. The unamortized notional
principal amount at January 2, 2000 was $2,961. The fair value at
January 2, 2000 was $288.
The Company has entered into a set of foreign exchange put and call
option contracts for the period December 1999 through September 2000 to
hedge the risk from settlement of US Dollar-denominated debt with
Mexican Pesos. Buying a Peso put allows the Company to exchange a
specified quantity of Pesos for U.S. Dollars with the seller of the put
at a fixed exchange rate through a specified date. Selling a Peso put
allows the buyer of the put to exchange a specified quantity of Pesos
for U.S. Dollars with the Company at a fixed exchange rate through a
specified date. Selling a Peso call allows the buyer of the call to
exchange a specified quantity of Pesos for U.S. Dollars with the
Company at a fixed exchange rate through a specified date. The set of
contracts effectively fixes the exchange rate for Pesos to Dollars to a
range with a ceiling determined by the strike rate of the call sold,
and a floor determined by the strike rate of the put purchased but
further limited to the strike rate of the put sold. If the actual
market rate of exchange declines past the strike rate of the put sold,
the benefit of the put purchased is gradually offset to zero at which
point the Company is effectively exposed to fluctuation in the
Peso/U.S. Dollar rate as though no hedge contract existed. The cost of
the first put and premiums received from sale of the second put and the
call, are amortized over the life of the contracts and are recorded as
an adjustment to foreign exchange gains or losses to income. The fair
value of these contracts at January 2, 2000 was ($101).
5
<PAGE>
The Company enters into forward foreign exchange contracts to mitigate
the risk from anticipated settlement in local currencies of
inter-company purchases and sales. These contracts generally require
the Company to exchange foreign currencies for U.S. dollars. The
contracts are marked to market, and the related adjustment is
recognized in other expense (income). The related amounts payable to,
or receivable from, the counter-parties are included in accounts
payable or accounts receivable. The Company has $5,395 of forward
exchange contracts at January 2, 2000. The unrealized portion of the
fair value of the contracts at January 2, 2000 was immaterial.
The Company also enters into forward foreign exchange contracts to
hedge the risk from anticipated settlement in local currencies of trade
sales. These contracts generally require the Company to exchange
foreign currencies for Pounds Sterling. The related amounts receivable
from the trade customers are included in accounts receivable. The
Company has approximately $5,412 of such forward exchange contracts at
January 2, 2000. The unrealized portion of the fair value of the
contracts at January 2, 2000, was $326.
The Company is exposed to risk from fluctuating prices for zinc used in
the manufacturing process. The Company hedges some of this risk through
the use of commodity swaps, calls and puts. The swaps effectively fix
the floating price on a specified quantity of a commodity through a
specified date. Buying calls allows the Company to purchase a specified
quantity of a commodity for a fixed price through a specified date.
Selling puts allows the buyer of the put to sell a specified quantity
of a commodity to the Company for a fixed price through a specific
date. The maturity of, and the quantities covered by, the contracts
highly correlate to the Company's anticipated purchases of the
commodities. The cost of the calls, and the premiums received from the
puts, are amortized over the life of the contracts and are recorded in
cost of goods sold, along with the effects of the swap, put and call
contracts.
At January 2, 2000, the Company had entered into a series of swaps for
zinc with a contract value of $3,866 for the period December 1999
through September 2000. While these transactions have no carrying
value, the unrealized portion of the fair value of these contracts
at January 2, 2000, was $621.
2 INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
JANUARY 2, 2000 SEPTEMBER 30, 1999
--------------- ------------------
<S> <C> <C>
Raw material..................... $31,197 $29,014
Work-in-process.................. 11,100 15,888
Finished goods................... 40,282 36,716
-------- --------
$82,579 $81,618
======= =======
</TABLE>
6
<PAGE>
3 OTHER COMPREHENSIVE INCOME
Comprehensive income and the components of other comprehensive income
(loss) for the three months ended January 2, 2000 and January 3, 1999
are as follows:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Net income.................................................. $13,919 $9,992
Other comprehensive (loss); foreign currency translation.... (790) (96)
------- ------
Comprehensive income........................................ $13,129 $9,896
======= ======
</TABLE>
4 NET INCOME PER COMMON SHARE
Net income per common share is calculated based upon the following
shares:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Basic....................................................... 27,490 27,483
Effect of assumed conversion of stock options............... 1,616 1,688
----- -----
Diluted..................................................... 29,106 29,171
====== ======
</TABLE>
5 COMMITMENTS AND CONTINGENCIES
In March 1998, the Company entered into an agreement to purchase
certain equipment and to pay annual royalties. In connection with the
1998 agreement, which supersedes previous agreements dated December
1991, and March 1994, the Company committed to pay royalties of $2,000
in 1998 and 1999, $3,000 in 2000 through 2002, and $500 in each year
thereafter, as long as the related equipment patents are enforceable
(2022). The Company incurred royalty expenses of $2,000 for 1997, 1998
and 1999. Additionally, the Company has committed to purchase $519 of
tooling at January 2, 2000.
The Company has provided for the estimated costs associated with
environmental remediation activities at some of its current and former
manufacturing sites. In addition, the Company, together with other
parties, has been designated a potentially responsible party at various
sites on the United States EPA National Priorities List (Superfund).
The Company provides for the estimated costs of investigation and
remediation of these sites when such losses are probable and the
amounts can be reasonably estimated. The actual cost incurred may vary
from these estimates due to the inherent uncertainties involved. The
Company believes that any additional liability in excess of the amounts
provided of $2,639, which may result from resolution of these matters,
will not have a material adverse effect on the financial condition,
liquidity, or cash flow of the Company.
The Company has certain other contingent liabilities with respect to
litigation, claims and contractual agreements arising in the ordinary
course of business. In the opinion of management, such contingent
liabilities are not likely to have a material adverse effect on the
financial condition, liquidity or cash flow of the Company.
7
<PAGE>
6 OTHER
During 1999, the Company recorded special charges as follows: (i)
$2,528 of employee termination benefits for 43 employees related to
organizational restructuring in the U.S. and Europe, (ii) $1,300 of
charges related to the discontinuation of the manufacturing of
silver-oxide cells at the Company's Portage, Wisconsin, facility, and
(iii) $2,100 of charges related to the termination of non-performing
foreign distributors. The Company also recognized special charges of
$803 related to the investigation of financing options and developing
organizational strategies for the Latin American acquisition.
1999 RESTRUCTURING SUMMARY
<TABLE>
<CAPTION>
TERMINATION OTHER
BENEFITS COSTS TOTAL
<S> <C> <C> <C>
Expense accrued.......................... $2,528 $3,400 $5,928
Cash expenditures........................ (246) -- (246)
Balance September 30, 1999................ $2,282 $3,400 $5,682
====== ====== ======
Cash expenditures....................... (1,179) (32) (1,211)
Non-cash Charges........................ -- (2,791) (2,791)
Balance January 2, 2000................... $1,103 $ 577 $1,680
====== ====== ======
</TABLE>
During 1998, the Company recorded special charges and credits as
follows: (i) a credit of $1,243 related to the settlement of deferred
compensation agreements with certain former employees, (ii) charges of
$5,280 related to (a) the September 1998 closing of the Company's
Newton Aycliffe, United Kingdom, packaging facility, (b) the phasing
out of direct distribution by June 1998 in the United Kingdom, and (c)
the September 1998 closing of one of the Company's German sales
offices, which amounts include $1,771 of employee termination benefits
for 73 employees, $1,457 of lease cancellation costs, and $1,032 of
equipment and intangible asset write-offs, and $1,020 of other costs,
(iii) charges of $2,184 related to the closing of the Company's
Appleton, Wisconsin, manufacturing facility, which amount includes
$1,449 of employee termination benefits for 153 employees, $200 of
fixed asset write-offs and $535 of other costs, (iv) charges of $1,963
related to the exit of certain manufacturing operations at the
Company's Madison, Wisconsin, facility, which amount includes $295 of
employee termination benefits for 29 employees, $1,256 of fixed asset
write-offs, and $412 of other costs, (v) a $2,435 gain on the sale of
the Company's previously closed Kinston, North Carolina, facility, (vi)
charges of $854 related to the secondary offering of the Company's
common stock, and (vii) miscellaneous credits of $420. A summary of the
1998 restructuring activities follows:
8
<PAGE>
1998 RESTRUCTURING SUMMARY
<TABLE>
<CAPTION>
TERMINATION OTHER
BENEFITS COSTS TOTAL
<S> <C> <C> <C>
Expense accrued.......................... $3,700 $3,800 $7,500
Change in estimate....................... (100) 500 400
Expensed as incurred..................... 200 1,300 1,500
Cash expenditures........................ (1,500) (1,400) (2,900)
Non-cash charges......................... -- (1,600) (1,600)
------ ------- -------
Balance September 30, 1998................. $2,300 $2,600 $4,900
====== ====== ======
Change in estimate....................... (500) -- (500)
Expensed as incurred..................... 300 2,800 3,100
Cash expenditures........................ (2,000) (4,500) (6,500)
Non-cash charges......................... -- (900) (900)
----- ----- -----
Balance September 30, 1999................. $ 100 $ -- $ 100
===== ===== =====
Cash expenditures.......................... (100) -- (100)
Balance January 2, 2000.................... -- -- --
========== ===== ======
</TABLE>
7 SEGMENT INFORMATION
The Company manages operations in three reportable segments based upon
geographic area. North America includes the United States and Canada;
Latin America includes Mexico, Central America, and South America;
Europe/Rest of World ("Europe/ROW") includes the United Kingdom, Europe
and all other countries in which the Company does business.
The Company manufactures and markets dry cell batteries including
alkaline, zinc carbon, alkaline rechargeable, hearing aid, and other
specialty batteries and lighting products throughout the world. These
product lines are sold in all geographic areas except Latin America
where revenues have historically been derived primarily from zinc
carbon and some alkaline batteries and lighting products.
Net sales and cost of sales to other segments have been eliminated. The
gross contribution of inter segment sales is included in the segment
selling the product to the external customer. Segment revenues are
based upon the geographic area in which the product is sold.
The reportable segment profits do not include interest expense,
interest income, and income tax expense. Also, not included in the
reportable segments, are corporate expenses including corporate
purchasing expense, general and administrative expense and research and
development expense. Research and development depreciation and
amortization costs are reflected as corporate expense. All other
depreciation and amortization included in income from operations is
related to reportable segments amortization. Costs are identified to
reportable segments or corporate, according to the function of each
cost center. Variable allocations of revenues and costs are not made
for segment reporting.
The reportable segment assets do not include cash, deferred tax
benefits, investments, long term inter company receivables, most
deferred charges, and miscellaneous assets. All capital expenditures
are related to reportable segments. Variable allocations of assets are
not made for segment reporting.
9
<PAGE>
<TABLE>
<CAPTION>
REVENUES FROM EXTERNAL CUSTOMERS THREE MONTH PERIODS ENDED
JANUARY 2, 2000 JANUARY 3, 1999
<S> <C> <C>
North America............................................... $166,436 $141,105
Latin America............................................... 30,869 1,802
Europe/ROW.................................................. 17,485 17,635
-------- --------
Total segments.............................................. $214,790 $160,542
======== ========
INTER SEGMENT REVENUES THREE MONTH PERIODS ENDED
JANUARY 2, 2000 JANUARY 3, 1999
North America............................................... $6,791 $5,504
Latin America............................................... -- --
Europe/ROW.................................................. 161 196
------ ------
Total segments.............................................. $6,952 $5,700
====== ======
SEGMENT PROFIT THREE MONTH PERIODS ENDED
JANUARY 2, 2000 JANUARY 3, 1999
North America............................................... $29,759 $24,975
Latin America............................................... 5,666 427
Europe/ROW.................................................. 2,073 1,626
------- ------
Total segments.............................................. 37,498 27,028
Corporate expenses.......................................... 8,025 6,809
Special charges............................................. 0 648
Interest expense............................................ 8,121 3,656
Other (income) expense net.................................. (63) 227
------- -------
Income before income taxes.................................. $21,415 $15,688
======= =======
SEGMENT ASSETS THREE MONTH PERIODS ENDED
JANUARY 2, 2000 JANUARY 3, 1999
North America............................................... $285,104 $235,779
Latin America............................................... 182,196 --
Europe/ROW.................................................. 33,734 34,601
-------- --------
Total segments.............................................. $501,034 $270,380
Corporate................................................... 48,574 26,598
-------- --------
Total assets at period end.................................. $549,608 $296,978
======== ========
</TABLE>
10
<PAGE>
8 GUARANTOR SUBSIDIARIES (ROV HOLDING, INC. AND ROVCAL, INC.)
The following condensed consolidating financial data illustrate the
composition of the consolidated financial statements. Investments in
subsidiaries are accounted for by the Company and the Guarantor
Subsidiaries using the equity method for purposes of the consolidating
presentation. Earnings of subsidiaries are therefore reflected in the
Company's and Guarantor Subsidiarys' investment accounts and earnings.
The principal elimination entries eliminate investments in subsidiaries
and inter-company balances and transactions. Separate financial
statements of the Guarantor Subsidiaries are not presented because
management has determined that such financial statements would not be
material to investors. There are no components of other comprehensive
income related to the Guarantor Subsidiaries.
11
<PAGE>
RAYOVAC CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of January 2, 2000
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
------ ------------ ------------ ------------ ---------
-ASSETS-
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents .............................. $ 6,080 $ 45 $ 13,184 $ -- $ 19,309
Receivables ............................................ 104,692 22,747 40,871 (16,022) 152,288
Inventories ............................................ 58,596 -- 24,279 (296) 82,579
Prepaid expenses and other ............................. 16,987 342 3,816 -- 21,145
--------- --------- --------- --------- ---------
Total current assets .............................. 186,355 23,134 82,150 (16,318) 275,321
Property, plant and equipment, net .......................... 77,024 64 33,271 110,359
Deferred charges and other, net ............................. 34,359 50,000 2,808 (50,910) 36,257
Intangible assets, net ...................................... 53,036 -- 75,742 (1,107) 127,671
Investment in subsidiaries .................................. 152,310 80,353 -- (232,663) --
--------- --------- --------- --------- ---------
Total assets ........................................... $ 503,084 $ 153,551 $ 193,971 $(300,998) $ 549,608
========= ========= ========= ========= =========
-LIABILITIES AND SHAREHOLDERS' EQUITY-
Current liabilities:
Current maturities of long-term debt ................... $ 14,443 $ -- $ 10,409 $ (80) $ 24,772
Accounts payable ....................................... 76,596 -- 30,481 (15,446) 91,631
Accrued liabilities:
Wages and benefits and other ...................... 25,728 801 12,092 (110) 38,511
Recapitalization and other special charges ........ 1,942 -- 5 -- 1,947
--------- --------- --------- --------- ---------
Total current liabilities ..................... 118,709 801 52,987 (15,636) 156,861
Long-term debt, net of current maturities ................... 305,164 -- 50,460 (50,800) 304,824
Employee benefit obligations, net of current portion ........ 14,285 -- -- -- 14,285
Other ....................................................... 3,429 440 10,171 -- 14,040
--------- --------- --------- --------- ---------
Total liabilities ................................. 441,587 1,241 113,618 (66,436) 490,010
Shareholders' equity :
Common stock ........................................... 570 1 12,072 (12,073) 570
Additional paid-in capital ............................. 103,467 107,788 54,897 (162,567) 103,585
Retained earnings ...................................... 86,037 42,644 11,507 (56,168) 84,020
Accumulated other comprehensive income ................. 1,409 1,877 1,877 (3,754) 1,409
Notes receivable from officers/shareholders (890) -- -- -- (890)
--------- --------- --------- --------- ---------
190,593 152,310 80,353 (234,562) 188,694
Less treasury stock, at cost ................................ (129,096) -- -- -- (129,096)
-------- --------- --------- --------- ---------
Total shareholders' equity ............................. 61,497 152,310 80,353 (234,562) 59,598
--------- --------- --------- --------- ---------
Total liabilities and shareholders' equity ............. $ 503,084 $ 153,551 $ 193,971 $(300,998) $ 549,608
========= ========= ========= ========= =========
</TABLE>
12
<PAGE>
RAYOVAC CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Three month period ended January 2, 2000
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Guarantor Nonguarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Total
----------- ------------ -------------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Net sales ................................... $ 158,895 $ 13,039 $ 52,863 $ (10,007) $ 214,790
Cost of goods sold .......................... 77,430 12,648 30,763 (10,012) 110,829
--------- --------- --------- --------- ---------
Gross profit ............................. 81,465 391 22,100 5 103,961
Selling ..................................... 48,716 169 9,683 -- 58,568
General and administrative .................. 12,008 (3,619) 4,994 (18) 13,365
Research and development .................... 2,525 -- 30 -- 2,555
--------- --------- --------- --------- ---------
Total operating expenses ................. 63,249 (3,450) 14,707 (18) 74,488
Income from operations ................... 18,216 3,841 7,393 23 29,473
Interest expense ....................... 7,885 -- 261 (25) 8,121
Equity in profit of subsidiary ......... (8,185) (4,412) -- 12,597 --
Other expense (income) ................. (215) 5 123 24 (63)
--------- --------- --------- --------- ---------
Income before income taxes .................. 18,731 8,248 7,009 (12,573) 21,415
Income tax expense ......................... 4,836 63 2,597 -- 7,496
--------- --------- --------- --------- ---------
Net income ............................... $ 13,895 $ 8,185 $ 4,412 $ (12,573) $ 13,919
========= ========= ========= ========= =========
</TABLE>
13
<PAGE>
RAYOVAC CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Three month period ended January 2, 2000
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Guarantor Nonguarantor
Parent Subsidiaries Subsidiaries Eliminations
-------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Net cash provided (used) by operating activities ............... $ 7,235 $ (2) $ 4,809 $ (3,002)
Cash flows from investing activities:
Purchases of property, plant and equipment ............... (2,606) (866)
Proceeds from sale of property, plant, and equip ......... 326 -- -- --
-------- -------- -------- --------
Net cash used by investing activities .......................... (2,280) -- (866) --
Cash flows from financing activities:
Reduction of debt ........................................ (49,470) -- (5,061) --
Proceeds from debt financing ............................. 45,617 -- 4,690 3,003
Other .................................................... 3,607 -- -- --
-------- -------- -------- --------
Net cash provided (used) by financing activities ............... (246) -- (371) 3,003
Effect of exchange rate changes on cash and cash
equivalents .............................................. -- -- (36) --
-------- -------- -------- --------
Net increase (decrease) in cash and cash equivalents ........... 4,709 (2) 3,536 1
Cash and cash equivalents, beginning of period ................. 1,371 47 9,648 (1)
-------- -------- -------- --------
Cash and cash equivalents, end of period ....................... $ 6,080 $ 45 $ 13,184 $ --
======== ======== ======== ========
<CAPTION>
Consolidated
Total
------------
<S> <C>
Net cash provided (used) by operating activities ............... $ 9,040
Cash flows from investing activities:
Purchases of property, plant and equipment ............... (3,472)
Proceeds from sale of property, plant, and equip ......... 326
--------
Net cash used by investing activities .......................... (3,146)
Cash flows from financing activities:
Reduction of debt ........................................ (54,531)
Proceeds from debt financing ............................. 53,310
Other .................................................... 3,607
--------
Net cash provided by financing activities ..................... 2,386
Effect of exchange rate changes on cash and cash
equivalents .............................................. (36)
--------
Net increase (decrease) in cash and cash equivalents ........... 8,244
Cash and cash equivalents, beginning of period ................. 11,065
--------
Cash and cash equivalents, end of period ....................... $ 19,309
========
</TABLE>
14
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FISCAL FIRST QUARTER ENDED JANUARY 2, 2000 COMPARED TO
FISCAL FIRST QUARTER ENDED JANUARY 3, 1999
NET SALES. Net sales for the three months ended January 2, 2000 (the
"Fiscal 2000 Quarter") increased $54.3 million, or 33.8%, to $214.8 million
from $160.5 million in the three months ended January 3, 1999 (the "Fiscal
1999 Quarter"). The increase was driven by increased sales of alkaline
batteries, lighting products, plus an additional $30.9 million in sales in
Latin America, which was the result of acquiring the Latin America battery
business from ROV Limited in August, 1999.
NET INCOME. Net income for the Fiscal 2000 Quarter increased $3.9
million, or 39.0%, to $13.9 million from $10.0 million in the Fiscal 1999
Quarter. The increase reflects the impact of sales growth, and the Latin
American acquisition, partially offset by slightly lower margins and increased
interest expense.
SEGMENT RESULTS. The Company manages operations in three reportable
segments based upon geographic area. North America includes the United States
and Canada; Latin America includes Mexico, Central America, and South
America; Europe/Rest of World ("Europe/ROW") includes the United Kingdom,
Europe and all other countries in which the company does business. We
evaluate segment profitability based on income from operations before
corporate expense which includes corporate purchasing expense, general and
administrative expense and research and development expense.
<TABLE>
<CAPTION>
NORTH AMERICA 2000 1999
---- ----
<S> <C> <C>
Revenue from external customers.................... $ 166.4 $ 141.1
Profitability...................................... 29.8 25.0
Profitability as a % of net sales.................. 17.9% 17.7%
Assets............................................. 285.1 235.8
</TABLE>
Our revenue from external customers increased $25.3 million, or 17.9%,
to $166.4 million in the Fiscal 2000 Quarter from $141.1 million the previous
year due primarily to increased sales of alkaline batteries, heavy duty
batteries, and lighting products. Alkaline sales increases were driven by strong
promotional programs, new customers, and expanded distribution with existing
customers. Exclusive distribution to a major mass merchandiser contributed to
the increase in sales of heavy duty batteries. Sales of lighting products
increased due primarily to new products and new distribution. Sales of hearing
aid batteries decreased in the Fiscal 2000 Quarter from last year, primarily as
a result of planned inventory reduction at several retail distribution accounts
and the discontinuation of some quarterly promotion programs.
Our profitability increased $4.8 million, or 19.2%, to $29.8 million
in fiscal 2000 from $25.0 million in the Fiscal 1999 Quarter. This increase
was primarily attributed to the sales increase and net sales growing faster
than expenses.
<TABLE>
<CAPTION>
LATIN AMERICA 2000 1999
---- ----
<S> <C> <C>
Revenue from external customers.................... $ 30.9 $ 1.8
Profitability...................................... 5.7 0.4
Profitability as a % of net sales.................. 18.4% 22.2%
Assets............................................. 182.2 --
</TABLE>
In August 1999, we acquired the consumer battery business of ROV
Limited in Latin America. ROV Limited was one of our customers before the
acquisition. The Fiscal 2000 Quarter sales in the region are primarily heavy
duty batteries. Revenue for the region for the Fiscal 1999 Quarter represents
sales primarily to ROV Limited as an external customer.
15
<PAGE>
Our profitability was $5.7 million, which was 18.4% of net sales for
the Fiscal 2000 Quarter, which represents an increase of $5.3 million from the
Fiscal 1999 Quarter.
<TABLE>
<CAPTION>
EUROPE/ROW 2000 1999
---- ----
<S> <C> <C>
Revenue from external customers.................... $ 17.5 $ 17.6
Profitability...................................... 2.1 1.6
Profitability as a % of net sales.................. 12.0% 9.1%
Assets............................................. 33.7 34.6
</TABLE>
Our revenue from external customers decreased $0.1 million, or 0.6%, to
$17.5 million in the Fiscal 2000 Quarter from $17.6 million the previous year.
Decreased sales of hearing aid and watch batteries were partially offset by
increased sales of alkaline batteries and lighting products. Our profitability
increased $0.5 million, or 31.3%, due to reduced operating expenses.
CORPORATE EXPENSE. Our corporate expense increased $1.2 million, or
17.6%, to $8.0 million in the Fiscal 2000 Quarter from $6.8 million the prior
year. As a percentage of total sales, our corporate expense was 3.7% compared to
4.2% in the previous year. This increase was primarily due to increased legal
expense and depreciation and other costs related to the operation of our new
computer systems.
SPECIAL CHARGES. We recorded no special charges in the Fiscal 2000
Quarter. Special charges of $0.6 million were recognized in the Fiscal 1999
Quarter for the relocation of equipment and personnel resulting from the
previously announced manufacturing rationalization projects.
INCOME FROM OPERATIONS. Our income from operations increased $9.9
million, or 50.5%, to $29.5 million in the Fiscal 2000 Quarter from $19.6
million the previous year. This increase was primarily due to increased sales
and gross profit which includes the Latin American acquisition, partially
offset by increased expenses.
INTEREST EXPENSE. Interest expense increased $4.4 million, or 118.9%,
to $8.1 million in the Fiscal 2000 Quarter from $3.7 million in the prior year
primarily due to financing costs associated with the Latin American acquisition
and higher working capital requirements to meet the expanding sales growth.
INCOME TAX EXPENSE. Our effective tax rate for the Fiscal 2000 Quarter
was 35.0% compared to 36.3% for the Fiscal 2000 Quarter. The lower rate this
year is partially the result of more foreign income.
LIQUIDITY AND CAPITAL RESOURCES
For the Fiscal 2000 Quarter, operating activities provided $9.0
million in net cash compared with $6.0 million for Fiscal 1999 Quarter.
Operating cash flow before working capital requirements generated $20.5
million in cash flow compared to $13.6 million in the year ago quarter
reflecting improvement in income from operations and higher non-cash
expenses. Non-cash expenses increased $3.0 million to $6.6 million in the
Fiscal 2000 Quarter from $3.6 million in the Fiscal 1999 Quarter. This
increase is the result of amortization of intangible assets that were
recognized as part of the Latin American acquisition and depreciation on the
SAP business enterprise system which was installed in fiscal year 1999.
Working capital requirements used cash of $11.5 million in the Fiscal 2000
Quarter which was $3.9 million higher than the Fiscal 1999 Quarter. This
reflects a larger increase in receivables than was experienced in the Fiscal
1999 Quarter primarily resulting from increased sales volume. Cash costs
associated with the restructuring activities announced in Fiscal 1999 have
been and are expected to be funded with cash provided from operations.
Net cash used by investing activities decreased $0.9 million versus the
same period a year ago primarily reflecting lower capital expenditures and
proceeds from the sale of a long-term asset held for sale. Capital expenditures
for the Fiscal 2000 Quarter were approximately $3.5 million, a decrease of $0.5
million from the Fiscal 1999 Quarter. Expenditures in the current year were
primarily for improvements to alkaline battery manufacturing and information
systems hardware and software. The Company currently expects capital spending
for fiscal 2000 to be
16
<PAGE>
approximately $25.0 million due to alkaline capacity expansion, alkaline
vertical integration programs, and enhancements to our warehouse and
distribution systems.
During the Fiscal 2000 Quarter our board of directors granted
approximately 523,500 options to purchase shares of common stock to various
employees of the company under the 1996 Stock Option Plan and the 1997
Incentive Plan. All grants have been at an exercise price equal to the market
price of the common stock on the date of the grant.
The Company believes that cash flow from operating activities and
periodic borrowings under its planned amended credit facilities will be
adequate to meet the Company's short-term and long-term liquidity
requirements prior to the maturity of those credit facilities, although no
guarantee can be given in this regard. The Company's current credit
facilities include a revolving credit facility of $250.0 million and term
loan of $75 million. As of January 2, 2000, $70.3 million of the term loan
remained outstanding and $182.1 million was outstanding under the revolving
facility with approximately $15.8 million of the remaining availability
utilized for outstanding letters of credit.
Year 2000
We undertook a Year 2000 project designed to remediate the impact of
the Year 2000 issue on our hardware and software systems, as well as other
business processes.
IMPACT OF YEAR 2000. We have experienced no material disruption to date to our
systems, processes, customers or suppliers attributable to Year 2000.
COSTS TO ADDRESS YEAR 2000 ISSUES. Expenditures directly related to
identification, evaluation and remediation of Year 2000 exposures were $0.7
million through fiscal 1999. Expenditures for the quarter ending January 2, 2000
were less than $0.1 million.
No further expenditures are projected.
Capital expenditures for projects undertaken for other reasons, but
which addressed Year 2000 issues (primarily SAP), were $11.7 million through
fiscal 1999. Other costs associated with these capital expenditures were $2.2
million.
RISK OF YEAR 2000 ISSUES. Although there have been no material disruptions to
date, disruptions to systems, processes, suppliers or customers could still
occur. We do not expect the impact on the Company's operations from any such
disruptions to be material.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
MARKET RISK FACTORS
We have market risk exposure from changes in interest rates, foreign
currency exchange rates and commodity prices. We use derivative financial
instruments for purposes other than trading to mitigate the risk from such
exposures.
A discussion of our accounting policies for derivative financial
instruments is included in Note 1 "Significant Accounting Policies and
Practices" in Notes to our Condensed Consolidated Financial Statements.
INTEREST RATE RISK
We have bank lines of credit at variable interest rates. The general
level of U.S. interest rates, LIBOR, IBOR, and to a lesser extent European Base
rates, primarily affects interest expense. We use interest rate swaps to manage
such risk. The net amounts to be paid or received under interest rate swap
agreements are accrued as interest rates
17
<PAGE>
change, and are recognized over the life of the swap agreements, as an
adjustment to interest expense from the underlying debt to which the swap is
designated. The related amounts payable to, or receivable from, the contract
counterparties are included in accrued liabilities or accounts receivable.
FOREIGN EXCHANGE RISK
We are subject to risk from sales and loans to our subsidiaries as well
as sales to, purchases from and bank lines of credit with, third-party
customers, suppliers and creditors, respectively, denominated in foreign
currencies. Foreign currency sales are made primarily in Pounds Sterling,
Canadian Dollars, German Marks, French Francs, Italian Lira, Spanish Pesetas,
Dutch Guilders, Mexican Pesos, Guatemalan Quetzals, Dominican Pesos, Venezuelan
Bolivars and Honduran Lempira. Foreign currency purchases are made primarily in
Pounds Sterling, German Marks, French Francs, Mexican Pesos, Dominican Pesos,
and Guatemalan Quetzals. We manage our foreign exchange exposure from
anticipated sales, accounts receivable, intercompany loans, firm purchase
commitments and credit obligations through the use of naturally occurring
offsetting positions (borrowing in local currency), forward foreign exchange
contracts, foreign exchange rate swaps and foreign exchange options. The related
amounts payable to, or receivable from, the contract counter parties are
included in accounts payable or accounts receivable.
COMMODITY PRICE RISK
We are exposed to fluctuation in market prices for purchases of zinc
used in the manufacturing process. We use commodity swaps, calls and puts to
manage such risk. The maturity of, and the quantities covered by, the contracts
are closely correlated to our anticipated purchases of the commodities. The cost
of calls, and the premiums received from the puts, are amortized over the life
of the contracts and are recorded in cost of goods sold, along with the effects
of the swap, put and call contracts. The related amounts payable to, or
receivable from, the counterparties are included in accounts payable or accounts
receivable.
SENSITIVITY ANALYSIS
The analysis below is hypothetical and should not be considered a
projection of future risks. Earnings projections are before tax.
As of January 2, 2000, the potential change in fair value of
outstanding interest rate derivative instruments, assuming a 1% unfavorable
shift in the underlying interest rates would be a loss of $2.1 million. The net
impact on reported earnings, after also including the reduction in one year's
interest expense on the related debt due to the same shift in interest rates,
would be a net gain of $0.4 million.
As of January 2, 2000, the potential change in fair value of
outstanding foreign exchange rate derivative instruments, assuming a 10%
unfavorable change in the underlying foreign exchange rates would be a loss of
$1.9 million. The net impact on future cash flows, after also including the gain
in value on the related accounts receivable and contractual payment obligations
outstanding at January 2, 2000 due to the same change in exchange rates, would
be a net loss of $.1 million.
As of January 2, 2000, the potential change in fair value of
outstanding commodity price derivative instruments, assuming a 10% unfavorable
change in the underlying commodity prices would be a loss of $0.4 million. The
net impact on reported earnings, after also including the reduction in cost of
one year's purchases of the related commodities due to the same change in
commodity prices, would be a net gain of $1.3 million.
18
<PAGE>
FORWARD LOOKING STATEMENTS
Certain of the information contained in this Form 10-Q, including
without limitation statements made under Part I, Item 1, "Financial
Statements" and Part I, Item 2, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Part I, Item 3, "Quantitative
and Qualitative Disclosures about Market Risk" which are not historical facts,
may include "forward-looking statements" within the meaning of Section 21E of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In
reviewing such information, you should note that our actual results may differ
materially from those set forth in such forward-looking statements.
Important factors that could cause our actual results to differ
materially from those included in the forward-looking statements made herein
include, without limitation, (1) significant changes in consumer demand for
household or hearing aid batteries; (2) the loss of, or a significant
reduction in, sales through a significant retail customer; (3) the
introduction of new product features or new battery technology by a
competitor; (4) the enactment of unexpected environmental regulations
negatively impacting consumer demand for certain of our battery products; (5)
difficulties or delays in the integration of operations of acquired
companies; (6) residual Year 2000 problems of the Company or of our customers
or suppliers which may make it difficult or impossible to fulfill their
commitments to us; and (7) currency fluctuations in significant international
markets.
Additional factors and assumptions that could generally cause our
actual results to differ materially from those included in the forward-looking
statements made herein include, without limitation, (1) our ability to develop
and introduce new products, (2) the effects of general economic conditions in
the United States or abroad, (3) the sufficiency of our production capacity to
meet future demand for our products, (4) our ability to keep pace with the
technological standards in our industry (5) our ability to continue to penetrate
and develop new distribution channels for our products. Other factors and
assumptions not identified above were also involved in the derivation of the
forward-looking statements contained in this Form 10-Q and the failure of such
other assumptions to be realized, as well as other factors, may also cause
actual results to differ materially from those projected. We assume no
obligation to update these forward-looking statements to reflect actual results
or changes in factors or assumptions affecting such forward-looking statements.
19
<PAGE>
PART II. OTHER INFORMATION
Item 1: Legal Proceedings
There have been no significant changes in the status of Rayovac's
legal proceedings since the filing of Rayovac's Annual Report on Form 10-K
for its fiscal year ended September 30, 1999 ("1999 Form 10-K") with the
exception of the following: (a) in our patent infringement lawsuit against
Duracell Incorporated and The Gillette Company (Rayovac Corporation v.
Duracell Incorporated and The Gillette Company, Case No. 99-C-0272C O, United
States District Court for the Western District of Wisconsin) as described in
our 1999 Form 10-K, the trial date has been moved from April 3, 2000 to April
17, 2000; (b) in The Gillette Company's patent infringement lawsuit against
us (The Gillette Company v. Rayovac Corporation, Case No. 99-CV-11555-PBS,
United States District Court for the District of Massachusetts) as described
in our 1999 Form 10-K, we answered Gillette's complaint on December 6, 1999
and denied all material allegations in that complaint; and (c) in our lawsuit
against one of our insurance carriers for recovery of certain environmental
claims (Rayovac Corporation v. Employers Insurance of Wausau, Case No. 99 CV
2339, Dane County (WI) Circuit Court) as described in our 1999 Form 10-K, the
court has granted the defendant insurance company until March 6, 2000 to
answer our complaint.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
<S> <C>
3.1+ Amended and Restated Articles of Incorporation of the Company.
3.2****** Amended and Restated By-laws of the Company, as amended through May 17, 1999.
4.1** Indenture, dated as of October 22, 1996, by and among the Company, ROV Holding, Inc.
and Marine Midland Bank, as trustee, relating to the Company's 10-1/4% Senior
Subordinated Notes due 2006.
4.2****** First Supplemental Indenture, dated as of February 26, 1999, by and among the
Company, ROV Holding, Inc. and HSBC Bank USA (formerly known as Marine Midland Bank)
as trustee, relating to the Company's 10-1/4% Senior Subordinated Notes due 2006.
4.3+++++ Second Supplemental Indenture, dated as of August 6, 1999, by and among the Company,
ROV Holding, Inc. and HSBC Bank USA (formerly known as Marine Midland Bank) as
trustee, relating to the Company's 10-1/4% Senior Subordinated Notes due 2006.
4.4** Specimen of the Notes (included as an exhibit to Exhibit 4.1)
4.5**** Amended and Restated Credit Agreement, dated as of December 30, 1997, by and among
the Company, the lenders party thereto and Bank of America National Trust and Savings
Association ("BofA"), as Administrative Agent.
4.6+++++ Second Amended and Restated Credit Agreement, dated as of August 9, 1999, by and
among the Company, the lenders party thereto and Bank of America, NA or
Administrative Agent.
4.7** The Security Agreement, dated as of September 12, 1996, by and among the Company, ROV
Holding, Inc. and BofA.
4.8** The Company Pledge Agreement, dated as of September 12, 1996, by and between the
Company and BofA.
4.9*** Shareholders Agreement, dated as of September 12, 1996, by and among the Company and
the shareholders of the Company referred to therein.
4.10*** Amendment No. 1 to Rayovac Shareholders Agreement, dated August 1, 1997, by and among
the Company and the shareholders of the Company referred to therein.
20
<PAGE>
4.11***** Amendment No. 2 to Rayovac Shareholders Agreement, dated as of January 8, 1999, by
and among the Company and the Shareholders of the Company referred to therein.
4.12* Specimen certificate representing the Common Stock.
27 Financial Data Schedule.
</TABLE>
- ----------------
* Incorporated by reference to the Company's Registration Statement
on Form S-1 (Registration No. 333-35181) filed with the
Commission.
** Incorporated by reference to the Company's Registration Statement
on Form S-1 (Registration No. 333-17895) filed with the
Commission.
*** Incorporated by reference to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended June 29, 1997, filed
with the Commission on August 13, 1997.
**** Incorporated by reference to the Company's Registration Statement
on Form S-3 (Registration No. 333-49281) filed with the
Commission.
***** Incorporated by reference to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended January 3, 1999, filed
with the Commission on February 17, 1999.
****** Incorporated by reference to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended April 4, 1999, filed
with the Commission on May 17, 1999.
+ Incorporated by reference to the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 1997, filed with the
Commission on December 23, 1997.
+++++ Incorporated by reference to the Company's Current Report on Form
8-K filed with the Commission on August 24, 1999, as subsequently
amended on October 26, 1999.
(b) Reports on Form 8-K: On October 26, 1999, we filed two current reports on
Form 8-K/A. Amendment number one provided information required by Item 7 of
our Form 8-K originally filed on August 9, 1999 in connection with our
Latin American acquisition. Amendment two amended and supplemented certain
of the exhibits thereto.
21
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: February 11, 2000
RAYOVAC CORPORATION
By:
---------------------------------------------
Randall J. Steward
Executive Vice President of Administration
and Chief Financial Officer
22
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS AS OF AND FOR THE THREE MONTHS ENDED
JANUARY 2, 2000.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> JAN-02-2000
<CASH> 19,309
<SECURITIES> 0
<RECEIVABLES> 153,833
<ALLOWANCES> 1,545
<INVENTORY> 82,579
<CURRENT-ASSETS> 275,321
<PP&E> 222,504
<DEPRECIATION> 112,145
<TOTAL-ASSETS> 549,608
<CURRENT-LIABILITIES> 156,861
<BONDS> 329,596
0
0
<COMMON> 570
<OTHER-SE> 59,028
<TOTAL-LIABILITY-AND-EQUITY> 549,608
<SALES> 214,790
<TOTAL-REVENUES> 214,790
<CGS> 110,829
<TOTAL-COSTS> 110,829
<OTHER-EXPENSES> 74,149
<LOSS-PROVISION> 276
<INTEREST-EXPENSE> 8,121
<INCOME-PRETAX> 21,415
<INCOME-TAX> 7,496
<INCOME-CONTINUING> 13,919
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,919
<EPS-BASIC> 0.51
<EPS-DILUTED> 0.48
</TABLE>
